House Bill Seeks 5-Year Moratorium of Jones Act in Puerto Rico

A foreign cargo ship in the port of San Juan in the aftermath of Hurricane Maria, September 24, 2017. REUTERS/Carlos Garcia Rawlins

Congressman Gary Palmer (R-AL) and Congresswoman Nydia Velázquez (D-NY) have introduced a bill that would place a 5-year moratorium of the Jones Act in Puerto Rico as the U.S. commonwealth recovers from Hurricane Maria.

The bill, known as the Puerto Rico Humanitarian Act (H.R. 3966), was introduced before the House Transportation and Infrastructure and Armed Services committees last Thursday, one day after the Department of Homeland Security said an extension of the 10-day waiver of the Jones Act in Puerto Rico was not needed. The waiver expired this past Sunday with the DHS determining that there was an “ample supply of Jones Act-qualified vessels to ensure that cargo is able to reach Puerto Rico”.

The proposed Puerto Rico Humanitarian Relief Act would a provide a 5-year moratorium of the Jones Act as Puerto Rico recovers and rebuilds in the aftermath of Hurricane Maria, which devastated the island in September.

“The Puerto Rico Humanitarian Relief Act would provide relief from this burdensome regulation and allow Puerto Rico the opportunity to rebuild their island without added costs and delays caused by the requirements of the Jones Act,” Palmer and Velázquez said a joint statement.

In the statement, the two lawmakers pointed to studies by the University of Puerto Rico and Federal Reserve Bank of New York that claim the Jones Act costs Puerto Rico more than $500 million per year and doubles freight rates from the U.S. East Coast to and from the island, respectively.

The statement fails to mention the 2013 U.S. Government Accountability Office report, widely regarded as the most comprehensive report into the Jones Act’s impacts on Puerto Rico to date, which found that it is nearly impossible to determine for certain the extent to which freight rates in U.S. mainland to Puerto Rico trade are higher compared foreign carriers due to the number of determining factors that influence freight rates and product prices. The report however was conclusive in its findings that any modifications of the Jones Act in Puerto Rico raise concerns over the effects on the U.S. merchant marine and the U.S. shipbuilding industry, both of which are beneficial to national security.

“The effects of modifying the application of the Jones Act for Puerto Rico are highly uncertain, and various trade-offs could materialize depending on how the Act is modified,” the GAO clearly stated in its findings.

“Now that the temporary Jones Act waiver for Puerto Rico has expired, it is more important than ever for Congress to pass my bill to permanently exempt Puerto Rico from this archaic and burdensome law,” McCain said in a statement. “Until we provide Puerto Rico with long-term relief, the Jones Act will continue to hinder much-needed efforts to help the people of Puerto Rico recover and rebuild from Hurricane Maria.”

The Jones Act requires that goods shipped between U.S. ports be transported on American-built ships that are owned and crew by Americans.

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